Cheap Bargains in a market of Fear. BAC, WFC, AA, X

The recent downturn in the market, sparked by fear of the Hindenburg nonsense, and the increase in unemployment claims, and the upset in housing sales have made investors wary that the chances of a new recession have increased severely.

Traders traded on an upbeat unemployment claims report today, before a sell off occurred just before noon, bringing the index down below the psychological level of 10k.

Traders fear the GDP report tomorrow, as they have suffered losses on the poor housing sales earlier on.

GDP report is predicted at a revised 1.3% instead of the earlier 2.4% growth. Traders want to see this higher than 1.3%. Anywhere at 1.8% would spark a relief rally in the market.

Unemployment is causing this recovery to falter. Obama has failed. Traders want to see higher job gains next week.

China and everywhere else in Asia is growing so rapidly, USA is really lagging behind this time. The Jakarta Composite is at an all time high. Thai market is going up… Why is the US failing? High taxes? Very poor social security programme.. Encouragement of laziness in the economy due to such welfare…

Bernanke will address the state of the economy tomorrow. And it only takes a few empty sweet talks to get this market moving northwards again.

So far, the futures market is in light red territory, as futures traders are uncertain of the outcome of Bernanke talk tomorrow. Ppl have already priced in the worst for the GDP numbers tomorrow.

The US economy is driven by consumers, we need more job growth to restart this recovery. Since most US companies have already weathered the worst storm, their balance sheet are healthy enough to keep their current workers. They may need to start hiring more in order to boost this economy.

Obama’s poor leadership has blocked one more job stimulus from taking place. He has spent a huge amount on green energy, but the economy is still in a mess.

If tomorrow, the market turns green, we should expect the DOW to zoom up again to 10500.

I am predicting a sidewards market till the end of the year which will close at 10800. Volatility will be common until the recovery ends and the economy is back to normal.

Good and cheap stocks to own: AA, BAC, C, WFC, X. The financials will do well this year, having repaid the TARP, these companies have emerged stronger. Recent comments and actions by CEOs have been optimistic (Alcoa CEO raised growth forecast to 12% from 10% for 2010, BAC CEO bought $400k worth of BAC shares recently, United States Steel is back in the green for its key operations, Wells Fargo is growing its earnings).

SENTIMENT: Slightly Bullish.